This morning a panel discussion featuring Dennie Kneale, former CNBC commentator, exposed the thought that Fanniemae is out of funds and requires another $5 billion to maintain operations in the mortgage market.
Does anyone have a view on the likelihood that Tea-Party-hostage U.S. House of Representatives will help them out with additional fundung? Or will Fannie default on its obligations?
Well, I was shocked with the debt ceiling fiasco so who knows. If they drop the guarantee, though, the housing market ... and, more importantly, the damage to the consumer's mentality regarding houses/homes and personal wealth ... will drag this economy even further into the abyss. You would have to think that the damage must be intentional to risk that for $5B when we have a $1.5T problem.
If Congress fails to allow an additional $5 billion in funding, does this mean Fannie will default on honoring it's "agency backing" of AGNC's mortgage portfolio? Doen't this relegate the quality of AGNC's mortgage assets to a much lower level, say such as Chimera, who experienced a huge haircut even before the debt-ceiling malaise affected the broad market?
I exited my position in NLY and AGNC a few weeks ago and would like to re-enter, but this issue is really scary!
The U.S. Congress can't seem to agree to anything that involves additional funding, as evidenced by Boehner's comments on the downgrade, yesterday, Kantors comments when he appeared on CNBC Friday morning or Michelle Bachmann's diatribe in a phone interview with Fox News, yesterday.